5 reasons why orthopedic practices, ASCs are ripe for private equity investment

Practice Management

As total joint replacements move into the outpatient setting, PE Hub Network posted an article by MHT Partners' Patrick Krause, who wrote that independent orthopedic groups, especially those with ASCs, are "an interesting area for investment."


Here are five key points from the article:


1. Private equity has already been investing in other outpatient specialties, such as ophthalmology and dermatology; investors can use a similar strategy when investing in orthopedic practices.


2. More orthopedic procedures are migrating into the outpatient center, which means there are more physician practice leaders looking to add ASCs. They have the potential to improve the quality of care and build their reputations at these centers.


3. Episodic care is becoming more prevalent in orthopedic surgery, and physicians with an ASC as well as imaging, physical therapy and rehabilitation can control the quality and cost of the episode of care. As a result, orthopedic surgeons can negotiate bundled deals.


4. The number of patients needing hip and knee replacement surgeries is expected to increase significantly over the next decade; by 2030, around 4 million Americans will have hip and knee replacements per year.


5. When physicians partner with private equity, they are able to "monetize part of their value of their practice today, maintain their salary and earnings, while they also have the opportunity to share in growth."


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